THE COMMISSIONER OF INCOME TAX vs. M/S EUREKA SALES CORPN

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ITA/578/2005HC DelhiDLHC01059583200501 March 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue was not maintainable as the tax effect was below the monetary limit of ₹20,00,000/- stipulated by CBDT Circular No. 21/2015. The Court reasoned that this Circular, which applies retrospectively to pending appeals, mandates that appeals below the specified tax limits should be withdrawn or not pressed. Therefore, the present appeal could no longer be prosecuted. The Court clarified that if the Assessing Officer finds any exception under the said Circular, they are at liberty to seek restoration of the appeal through an appropriate application. No other issue was decided on merits.

What were the facts?

This case involves an appeal filed by the Commissioner of Income Tax (Revenue) against an order of the Income Tax Appellate Tribunal (ITAT) concerning assessment year(s) not specified. The appeal was filed before the High Court of Delhi. The primary reason for the disposal of the appeal is a Circular issued by the Central Board of Direct Taxes (CBDT), Circular No. 21/2015, which revised the monetary limits for filing appeals. The tax effect in this appeal was found to be below the prescribed limit of ₹20,00,000/-. The High Court noted that the appeal could not be prosecuted and was no longer maintainable due to this monetary limit.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable before the High Court, given the tax effect is below the monetary limit prescribed by CBDT Circular No. 21/2015? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue, through its counsel, presented the appeal. However, the judgment focuses on the applicability of the CBDT Circular to the pending appeal. The Revenue implicitly sought to prosecute the appeal, but the Court's decision was based on the Circular's mandate regarding monetary limits.

AI-generated summary — verify with the full judgment below

$~56 * IN THE HIGH COURT OF DELHI AT NEW DELHI +

ITA 578/2005

THE COMMISSIONER OF INCOME TAX ..... Appellant

Through: Mr. Ruchir Bhatia, Advocate.

versus

M/S EUREKA SALES CORPN

..... Respondent

Through: None.

CORAM: HON’BLE MR. JUSTICE S. RAVINDRA BHAT HON’BLE MR. JUSTICE NAJMI WAZIRI

O R D E R %

01.03.2017

This Court had framed a question of law for consideration in this appeal. Given its pendency vide Circular No. 21/2015 dated 10.12.2015, the Central Board of Direct Taxes (CBDT) spelt out the monetary limits beyond which appeals could be preferred before the Income Tax Appellate Tribunal (ITAT), High Courts and SLP before the Supreme Court respectively. Clause 10 of the Circular reads as below:- “10. This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed.”

This Court notices that the tax effect i.e. upon the assessed income, is

below the prescribed limit of `20,00,000/-. The present appeal cannot be, therefore, prosecuted and is no longer maintainable. It is, however, clarified that in the event, the Assessing Officer discerns any exception in terms of the said Circular, it is open to the Revenue to seek restoration of the concerned appeal by an appropriate application. The appeal is dismissed but in the above terms.

S. RAVINDRA BHAT, J

NAJMI WAZIRI, J MARCH 01, 2017 /vikas/

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